Overseas Civilian Contractors

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Afghanistan’s Control and Audit Office Requires Operational and Budgetary Independence, Enhanced Authority, and Focused International Assistance to Effectively Prevent and Detect Corruption

OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR AFGHANISTAN RECONSTRUCTION

April 10, 2010   Original Here

What SIGAR Reviewed

The strengthening of institutions that oversee and implement anti-corruption measures in Afghanistan is a key operational principle of the U.S. Government’s draft Anti-Corruption Strategy for Afghanistan. The United Nations Convention against Corruption requires Afghanistan to establish accounting and auditing standards, as well as related oversight. As Afghanistan’s Supreme Audit Institution, the Control and Audit Office (CAO) is responsible for auditing the financial matters of the government. It has audit authority over state entities within central and provincial governments as well as public enterprises, and carries out audits of funds provided to the Afghan government by external donors. This report assesses: (1) the CAO’s current capability and performance in fulfilling its mandate, (2) the assistance provided by the international community to strengthen the internal capacity of the CAO, and (3) the assistance provided by the U. S. Government to strengthen the CAO’s internal capacity. This report is part of a series of audits SIGAR is conducting to address U.S. efforts to combat corruption and strengthen the rule of law in Afghanistan. SIGAR conducted this performance audit in Kabul, Afghanistan, and in Washington, D.C., from December 2009 to April 2010 in accordance with generally accepted government auditing standards.

What SIGAR Found

The CAO’s current legislative framework is weak, does not provide the CAO with sufficient independence or authority to serve effectively as Afghanistan’s Supreme Audit Institution, and results in conflicting responsibilities, particularly with regard to Afghanistan’s Ministry of Finance. The CAO’s current legislative framework does not provide the CAO with budgetary or operational independence from the executive branch, and this lack of independence interferes with the CAO’s planning, reviewing, and reporting processes. In addition, the CAO’s enabling legislation does not provide the CAO with the authority to require audited entities to report on actions taken in response to CAO recommendations, or demand access to necessary documents, officials, and premises. Further, current legislation does not require the CAO to report to the National Assembly or to publicly release its audit reports. In late 2009, an international working group submitted revisions to a draft audit law to the Ministry of Justice (MoJ) that addressed many of these limitations. However, the MoJ’s February 2010 version of the draft new law did not include many of the group’s substantive revisions. Despite significant assistance from the international community—almost exclusively from the World Bank—the CAO continues to suffer from severe internal capacity constraints, including a lack of qualified auditors. In addition, while the CAO has formally adopted the standards of the International Organization of Supreme Audit Institutions, the CAO relies on international advisors and contracted auditors to ensure that some of its audits comply with those standards. Moreover, although the U.S. Agency for International Development has provided the CAO with a limited amount of assistance, that assistance has been aimed at allowing a few, select CAO management and staff personnel to attend conferences.

What SIGAR Recommends

To strengthen the CAO’s capability and capacity, SIGAR recommends that the U.S. Ambassador to Afghanistan: (1) urge the Afghan government to enact legislation providing the CAO with sufficient independence and authority to fulfill its responsibilities in accordance with internationally recognized audit standards, and (2) develop and implement a capacity development plan for the CAO, in cooperation with the CAO and international stakeholders, as part of the U.S. Government’s Anti-Corruption Strategy for Afghanistan. In consideration of issues such as CAO’s independence and authority, such a plan should include the identification of funding sources and donor responsibilities for capacity development and training; use of existing training possibilities within the U.S. government; and the appointment of expert audit mentors and advisors. In response to a draft of this audit report, the U.S. Embassy Kabul and the USAID Mission to Afghanistan concurred with SIGAR’s findings and recommendations, and outlined planned actions to address each of the recommendations.

April 10, 2010 - Posted by | Contractor Corruption, State Department, Wartime Contracting | , , , ,

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